Opinion

Wealth redistribution is flawed policy

Washington  Liberals have a rendezvous with regret. Their largest achievement is today’s redistributionist government. But such government is inherently regressive: It tends to distribute power and money to the strong, including itself.

Government becomes big by having big ambitions for supplanting markets as society’s primary allocator of wealth and opportunity. Therefore it becomes a magnet for factions muscular enough, in money or numbers or both, to bend government to their advantage.

The left’s centuries-old mission is to increase social harmony by decreasing antagonisms arising from disparities of wealth — to decrease inequality by increasing government’s redistributive activities. Such government constantly expands under the unending, indeed intensifying, pressures to correct what it disapproves of — the distribution of wealth produced by consensual market activities. But as government presumes to dictate the correct distribution of social rewards, the maelstrom of contemporary politics demonstrates that social strife, not solidarity, is generated by government transfer payments to preferred groups.

This includes generational strife. Most transfer payments redistribute wealth from workers to nonworkers in the form of pensions and medical care for retirees. The welfare state’s primary purpose is to subsidize the last years of Americans’ lives, and the elderly are, after a lifetime of accumulation, better off than most Americans: In 2009, the net worth of households headed by adults ages 65 and older was a record 47 times that of households headed by adults under the age of 35 — a wealth gap that doubled just since 2005.

The equalizing effects of redistributive transfer payments is less today than in 1979, when households in the lowest income quintile received 54 percent of such payments. In 2007, they received 36 percent.

Because Social Security and Medicare are not means-tested, the share of transfer payments going to middle- and upper-income households tends to increase, for several reasons. The retirement age is essentially fixed, but people are living longer. And because the welfare state is so good to them, the elderly are unusually diligent voters, and are especially apt to vote on the basis of protecting their benefits.

Beyond transfer payments, redistributionist government is itself governed by the law of dispersed costs and concentrated benefits: For example, sugar import quotas confer substantial wealth on a small cohort of producers already wealthy enough to work the political levers of redistributive government. The increased cost of sugar substantially penalizes consumers as a group, but not so noticeably that individuals protest.

The tax code, government’s favorite instrument for distributing wealth to favored factions, has been tweaked about 4,500 times in 10 years. Generally, the beneficiaries of these changes are interests sufficiently strong and sophisticated to practice rent-seeking.

Not only does redistributionist government direct wealth upward; in asserting a right to do so it siphons power into itself. A puzzling aspect of our politically contentious era is how little contention there is about the ethics of coercive redistribution by progressive taxation and other government “corrections” of social outcomes it considers unethical or unaesthetic.

This reticence, in an age in which political reticence is rare, reflects the difficulty of articulating principled defenses of these practices. They go undefended because they are generally popular with a public that misunderstands their net effects, and because the practices are the political class’s vocation today. The big winners from these practices are that class and the interests adept at collaborating with it.

Government uses redistribution to correct social outcomes that offend it. But government rarely explains, or perhaps even recognizes, the reasoning by which it decides why particular outcomes of consensual market activities are incorrect. When taxes are levied not to efficiently fund government but to impose this or that notion of distributive justice, remember: Taxes are always coerced contributions to government, which is always the first, and often the principal, beneficiary of them.

Try a thought experiment suggested decades ago by University of Chicago law professors Walter Blum and Harry Kalven in their 1952 essay “The Uneasy Case for Progressive Taxation,” published in their university’s law review. Suppose society’s wealth trebled overnight without any change in the relative distribution among individuals. Would the unchanged inequality at higher levels of affluence decrease concern about inequality?

Surely not: The issue of inequality has become more salient as affluence has increased. Which suggests two conclusions:

People are less dissatisfied by what they lack than by what others have. And when government engages in redistribution in order to maximize the happiness of citizens who become more envious as they become more comfortable, government becomes increasingly frenzied and futile.

More like this story on LJWorld.com

Comments

The Government, which are people too, take money from people that "can" and give it to people that "can't" is a "flawed policy"?

How can this be?

Anyone knows that if you give candy to crying children will only make them cry less. It will stop them from crying for more candy. Spoiling children is not good. So give your child candy whenever they cry.

G. Will is crazy. Taking money from people that "can" and giving it to people that "can't" is not "flawed policy". It stops spoiling people. It makes them happy and stops their crying. It makes them better New Americans. People that will take New America to "levels" not seen in awhile.

You can't divide up a child's laughter. All you can do is make more laughter.

By the same account, you cannot, at any time, simply take something from one segment of the populace and give it to the other without the first segment refusing to work simply because whatever they make will be given to others that do not do the same amount of work. By work, I mean effort beyond just the physical.

To put it another way, take your paycheck, divide it into 5 equal parts and simply give that money to 4 other people that did nothing to deserve it. Oh, and you don't get a vote on it happening or who it goes to.

Still just as happy with wealth distribution as you were before your check got hijacked?

Wealth redistributionists claim to be driven by a desire for equality, but in reality most of them are driven by envy and greed. "Thou shalt not covet thy neighbor's property" is one Commandment that is unknown to them.

No one in a free society is promised equality of result. What is promised in a free society is equality of opportunity. Wealth redistributionists forgot that maxim long ago.

The choice comes down what do Americans really want? A social welfare state, or one based on individual responsibility and achievement. The next election will have a good deal to do with this choice. Our living standards have shot up in my lifetime. The income of the average person, adjusted for inflation, is three times what it was when I was born (in 1959). The average life span of Americans is also 30 percent longer. These things did not happen because of some federal government bureaucracy doing central planning. It is the result of the spontaneous market created by individuals free to choose and pursues their own interests.

I, and many other Americans, would like a system that encourages responsibility and achievement, while also recognizing the disparities in birth and social situation, and trying to create a more level playing field. In addition, many would like for our society to help those, like the developmentally disabled, that are limited in their ability to care for themselves.

It's not an either-or choice between some sort of "centrally planned" socialist government and a libertarian free market one.

Also, the increase in life span undoubtedly has much to do with some government regulations, like those on dangerous chemicals, food safety, etc.

Seems to me like those trying to make everything an either/or black and white choice and misrepresenting what liberals/progressives are actually saying really have nothing of their own to bring to the table.

And, yet, from what I know of your situation, you are quite well off, with a very nice house in a very nice area, children in private school, etc.

If lowering your taxes helps you, but harms somebody else, do you still want that?

The lack of fiscal responsibility in Washington is in fact a real problem, and I'm glad that you can see that both sides of the aisle are guilty of that. There was an interesting post with some statistics on that - it seems that Republican presidents from Reagan on are responsible for about 60% of our debt, and Democratic ones for about 30% of it.

It sure would be nice for the R advocates to stop claiming some sort of fiscal conservatism when that's clearly not the case.

I'm in favor of balanced budgets, by the way - they're just a good idea, regardless of who's in power. But, the nagging problem is how to balance the budget - there are disagreements about that.

We are not a bankrupt nation, although I will agree that the deficit and debt are too high. Cuts and higher taxes will be needed to correct it. No doubt. However, most of the spending was already in place before Obama took office, and you know this to be true. And while I am an atheist, I will agree with the sentiment, but will broaden it for you: God help us no matter who is elected. I want things to work out no matter who is in office.

To your list, I just want to point out one thing.
3. $143 billion: The estimated reduction in the deficit from the bill over the next 10 years.

It is projected to lower the debt. Further, healthy Americans because they are allowed access to medical care, will mean healthy workers. That will be a gain for the nation, don't you think?

Looking over the list, I see a lot of really positive things for our nation. Sorry you don't.

Of course a deficit reduction does not mean debt reduction. But a deficit reduction is a deficit reduction, which is better than a deficit inflation. Add it to other ways of lowering the deficit (cut spending elsewhere plus tax increases) and eventually (more like, hopefully) you get to the point where the debt can begin to be paid off.

I'm glad to know you don't dislike everything in the Affordable Care Act. It is a shame it became such a ridiculously partisan fight instead of everyone working together. And yes, I do think its passage was as partisan as the opposition to it.

Bailing out the Bush/Cheney Home Loan Wall Street Bank Fraud cost consumers $ trillions, millions of jobs, loss of retirement plans and loss of medical insurance. Exactly like the Reagan/Bush home loan scam. Déjà vu can we say. Yep seems to be a pattern.
http://www.dollarsandsense.org/archives/2009/0709macewan.html

5 Preferential Tax cuts = the ENTITLEMENT program for the wealthy which do nothing to make an economy strong or produce jobs. Tax cuts are a tax increase to others in order to make up the loss in revenue = duped again.

it's funny how a writer can slip in a false premise, and no one notices.
mr. will's false premise:
"The left’s centuries-old mission is to increase social harmony by decreasing antagonisms arising from disparities of wealth — to decrease inequality by increasing government’s redistributive activities."

from Wikipedia (and this is not the only source available):
Liberalism (from the Latin liberalis) is the belief in the importance of liberty and equal rights. Liberals espouse a wide array of views depending on their understanding of these principles, but generally liberals support ideas such as constitutionalism, liberal democracy, free and fair elections, human rights, capitalism, and freedom of religion. These ideas are widely accepted, even by political groups that do not openly profess a liberal ideological orientation.

false premises lead to false conclusions.
even worse, some of these false premises are delivered purpusefully and knowingly; and that makes it all propaganda.

Merrill I have a question. When W left office the national debt was $ 4 Trillion. Obama has run it up to $ 15 Trillion and counting. ( in 3 years no less ) Using your awsome math skills please explain to me how $ 4 Trillion is 81% of $ 15 Trillion

The deficit has rocketed upward under Obama, without question.That needs to be stopped, no matter who is president. Again, I'm not going to argue that with you. The down economy has definitely taken its toll. I just don't see your need to falsify numbers that are alarming all on their own.

and later in the wiki article:
Conservative commentator Glenn Beck referred to the Cloward-Piven Strategy often on his Fox News television show, Glenn Beck, during its run from 2009 to 2011, reiterating his opinion that it had helped to inspire President Barack Obama's economic policy. On February 18, 2010, for example, he said, "you’ve got total destruction of wealth coming... It’s the final phase of the Cloward-Piven strategy, which is collapse the system."[13]

Richard Kim, writing in 2010 in The Nation (in which the original essay appeared), called such assertions "a reactionary paranoid fantasy..." but says that "the left's gut reaction upon hearing of it--to laugh it off as a Scooby-Doo comic mystery--does nothing to blunt its appeal or limit its impact."[14] The Nation later stated that Beck blames the "Cloward-Piven Strategy" for "the financial crisis of 2008, healthcare reform, Obama's election and massive voter fraud" and has resulted in the posting of much violent and threatening rhetoric by users on Beck's website, including death threats against Frances Fox Piven.

My understanding of a national system to end poverty as they describe it is like a sort of national welfare system, rather than the piecemeal state by state system they were looking at.

Interestingly, I heard a libertarian speak once who said that if we're going to try to help poor people, it would be better to just give them money, rather than instituting all of these government bureaucracies - that seems similar to the Cloward-Piven approach to me.

Anyway, the part I liked was the idea that we might have some sort of national solution to poverty.

My Gawd just feel that blowback, must have been a terrorist attack or occupiers, or both!!
Here at ground zero we are trying to figure out if we should build a monument to BAA or a crucifix. Clearly he is suffering either way from the oppression caused by the middle class who are bleeding the economy dry.
This Will article sounds like it came right out of one of Fox's shrew faced blonds!! But I digress.

Decisions about how to honor and acknowledge BBA's reactionary blog outburst will be made once vote tallying has been completed by Corrupt Corporate Lobbyists(the only ones allowed to vote. The Plutocracy waits for no one, down with Democracy.
Oh, did we forget to blame Obama for everything.
The biggest blog occupier today has just served notice to vacate the LJW blog due to the toxic waste contamination caused by an apparent leak from a deranged keyboard. It appears this unmanned drone keyboards mission was to create mass quantities of verbiage to overcome rationality. Having No Clear Vision is blamed for this missions failure and no system NEOCON Overlords were available for comment at the time of this incident.
But this news just in:
Wealth "redistribution" is what the elitist wealthy have been doing for years, but in their tippy top world, that is called Free Market Capitalism. Low wages, fewer benefits, higher costs of goods from the company store, outsourcing manufacturing, less taxes for the wealthy, more taxes for the middle class(whom they claim are not paying enough). War mongering and policing the world is The Born Again Way and never mind the humanity blowing costs it takes to feed the Corrupt Corporate driven military complex(mostly so called Christians who are also primarily Republicans). Obama caused that! You know the black and white thinkers who boil everything down to it's just math. Obama caused that. Don't believe that there can never be enough war, War makes the Free Market go round with a bit of help from The Free Will. The two are genetically related. At least among the genetically bonded wealthy elite. Care for boot straps with that gene pool? Some call it inheritance some call it.... keeping it in the family among other things. But never ever Abort a mission once it has begun!

Obama caused everything wrong in the perceived world of some, but ownership of wrong doing has never been a strong suite of the ruling class.

But as the capitalist elite always say, "we are happy to create a crisis, so long as the working class pay". Job well done then. While you wanna be elitists are busy shooting yourselves in the foot, leave mine alone. Oh, I forgot Obama took your Conceal Carry permits and guns and ammo away while he was inside his mothers womb being initiated into the Muslim brotherhood, living in Kenya, redistributing wealth and organizing communities in Chicago with ACORN and not being born in Hawaii.

Will is correct in some of what he says. Some of the government programs started by liberals do not work as well as they should. Many things need to be looked at seriously and reconsidered. We cannot maintain the status quo.

However, what Will fails to realize is that liberals also brought about the end of slavery, the civil rights movement, votes for women, equal pay for equal work, etc... Consider if America had remained as someone like Strom Thurmond had had his way. Those are hardly things any thinking person would see as failures. Those are some of liberals' greatest achievements, and a shame on the legacy of the conservative movement.

Will is also correct in that wealth redistribution has hurt the country. Consider the debt when thinking about the government cuts in taxes to help the wealthy during a time of war, tax loopholes that only benefit the wealthy, lower taxes for people who only live off of their commulative wealth rather than the sweat of their brow, etc... Redistribution of more wealth from the middle class and the working poor to the already wealthy is on the verge of destroying our society, so in that regard, yes, wealth redistribution is destroying our country.

"Some of the government programs started by liberals do not work as well as they should. Many things need to be looked at seriously and reconsidered. We cannot maintain the status quo."

We should continually be looking at the way we do things, throwing out what doesn't work, dealing with unintended consequences and changing things as our society changes, rather than clinging to ideologies that never worked or no longer work.

I've always noticed that when people work together they get a lot more done and everybody is happier than when someone digs in their heels and refuses to budge because they know they are right---or are just stubborn.

But we have to admit sometimes that we might have been wrong for that to happen.

I remember another user -- someone who has since been banned, by the way -- who once used a link to a White Supremacy website to support an argument against Obama, and then sited The Onion (I kid you not!) to support a story on Vice President Biden. Golden.

But as I say, that was a completely different user than this relatively new user here. Completely different. Absolutely. That user has been banned, so how could he come back?

I recall Kealing saying that it wasn't allowed. You can't just request that all your posts be eliminated. The banned party I recall was actually going by an anonymous handle when the comments mentioned above were made.

Measures in modern parlance of a person's acheivements within society. Perhaps not the only marker, but certainly one of the most notable and definately the most easily tracked.

In all the years that I have been in the workforce, I have never once encountered an employee, be it management, middle management or lowly peon, that has not wanted a promotion, or at the very least a pay raise. I'm fairly certain that there no not a single poster on this forum, not just this singular thread, that has not strived to get either of those two options.

A newer car.

Newer smartphone.

More modern house.

All things that the vast majority in this nation want. Visible, tangible evidence that they are succeeding.

Pro sports contract.

Investment banker.

Politician.

Three of a long list of jobs that everyone would like to have the salary of yet complain that the salary is too high for those that do have it.

How many here would refuse that kind of a salary? Multiple millions of dollars a year to play 20ish games of football a year. But everyone says so-and-so isn't worth that much money "just to play a game." It's all well and good to gripe and complain about someone else having it and how they don't deserve that much, but how willing would you be to part with it were you to ever have it?

I have no hesitations or shame in admitting that I would love to have just one year's salary for most big name athletes. Buy a house, pay off my car loans, clear out the credit card debt, set my kids up for college and spoil my wife. After that, I have no clue what I would do with that much money. Pretty sure I wouldn't do the bonehead things a lot of them make news doing, though.

Balancing the playing field.

What playing field are you talking about? Have you been denied business loans to open a factory? Restaurant? Anything? I have issues with the personalities of some people that have vast sums of income, but I've never had an issue with them having the wealth in the first place. Everyone is definately welcome to their opinion, of course, but are you certain that this desire to "redistribute the wealth" or "level the playing field" is motivated by altruistic reasons, or is it more likely that it is motived by one single, honest fact.

You don't have it and short of winning Powerball, will most likely never have it.

I know I will likely never see those kinds of numbers in my bank account. I gladly admit it would be neat to see, but I'm honest enough to admit it's just not going to happen. It honestly doesn't phase me to not have it. It also doesn't phase me that someone else does. It's theirs, not mine, and they can do with it what they want. Everyone certainly gripes when someone tells them what to do with their money, but it's almost heresy to suggest that if you don't like it being done to you, don't do it to someone else.

Wealth redistribution is wrong.
We have been redistributing wealth to the upper-income levels for thirty years. That's been thirty years of union busting, wage suppression, pension ransacking, and tax cuts for the rich that has resulted in incomes for the 1%-ers tripling while wages for the rest of us stagnate. It's not socialism, it's simple fairness that we need.

Starting in 2003, George W. Bush destroyed the world economy by encouraging U.S. banks to make loans to those who could not afford them, through schemes such as the "American Dream Downpayment Initiative".

Also through the destruction of oversight, such as lawsuits to prevent state securities laws from being enforced on Bush's watch.

Once Bush's policies led to their inevitable result of economic collapse, the United States found itself in a situation where it had to take on debt in order to restore the economy.

Republicans in Congress were the ones behind eliminating the regulations that then allowed banks to bundle mortgages and sell them off as derivative investments. If the banking regulations hadn't been eliminated, banks would not have been able to bundle and sell mortgages. If banks have retained interest in the loans they were providing, they wouldn't have been so free in giving loans to people unable to pay them back.

You would do yourself a favor to not think in such a linear partisan manner. It was a double wammy put on the American people thanks to both parties.

Uh, sorry no...
The tax is only on PROFIT on home sales and the first $250,000 is exempt so very few people are going to be affected.
I like how you site (from a source). Who? Some guy you know who only watches FOX News?